Interxion Reports Second Quarter 2012 Results

AMSTERDAM–(BUSINESS WIRE)–

Interxion Holding NV (INXN), a leading European provider of carrier-neutral colocation data centre services, announced its results today for the three months ended 30 June 2012.

Highlights

• Revenue for the quarter increased by 13% to €68.0 million (Q2 2011: €60.0 million)
• Adjusted EBITDA for the quarter increased by 19% to €27.8 million (Q2 2011: €23.3 million)
• Adjusted EBITDA margin for the quarter increased to 40.8% (Q2 2011: 38.9%)
• Net profit increased by 67% to €8.7 million (Q2 2011: €5.2 million)
• Capital expenditure, including intangible assets, was €42.6 million

“Interxion continued its strong execution in the second quarter, delivering financial results that were consistent with our expectations,” said Interxion Chief Executive Officer, David Ruberg. “We continue to see broad-based customer demand for our high quality, connectivity driven data centres, and we are pleased to have announced the opening of the initial phases of new data centres in the London and Paris markets.”

Quarterly Review

Revenue for the second quarter of 2012 was €68.0 million, a 13% increase over the second quarter of 2011 and a 3% increase over the first quarter of 2012. Recurring revenue was €62.9 million, a 12% increase over the second quarter of 2011 and a 1% increase over the first quarter of 2012. Recurring revenue was 92% of total revenue.

Cost of sales for the second quarter increased by 11% to €28.2 million, compared with the second quarter of 2011. Gross profit margin increased to 58.5%, compared with 57.5% in the same quarter of 2011. Sales and marketing costs in the second quarter were €4.7 million, up 2% compared with the same quarter in the previous year. General and administrative costs, excluding depreciation, amortisation, impairments, increase in provision for onerous lease contracts, and share-based payments, were €7.3 million, an increase of 11% compared with the second quarter of 2011. Depreciation, amortisation, and impairments increased by 7%, compared with the previous-year second quarter, to €10.2 million.

Net financing costs for the second quarter of 2012 were €3.9 million, compared with €6.0 million in the second quarter of 2011, primarily as a result of higher interest capitalization because of increased data centre construction.

Net profit was €8.7 million in the second quarter of 2012, up 67% from the second quarter of 2011. Earnings per share in the second quarter of 2012 were €0.13, an increase of 63%, on a weighted average of 68.0 million diluted shares compared to €0.08 on a weighted average of 67.5 million diluted shares in the second quarter of 2011.

Adjusted EBITDA for the second quarter of 2012 was €27.8 million, up 19% year-on-year. Adjusted EBITDA margin expanded to 40.8%, compared with 38.9% in the second quarter of the previous year.

Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €29.4 million, up 27% year-on-year. Capital Expenditure, including intangible assets, was €42.6 million in the second quarter 2012.

Cash and cash equivalents were €84.5 million at 30 June 2012, down from €142.7 million at year-end 2011. The company’s revolving credit facility was amended during the quarter and remains undrawn.

Equipped space at the end of the second quarter 2012 was 65,300 square metres compared with 61,500 square metres at the end of the second quarter of 2011 and 64,800 square metres at the end of the first quarter of 2012. Revenue generating space was 48,600 square metres at the end of the second quarter 2012, compared to 45,300 square metres at the end of the second quarter of 2011 and 47,500 square metres at the end of the first quarter of 2012. Utilisation rate, the ratio of revenue-generating space to equipped space, was 74%, the same as the second quarter of 2011, and up from 73% in the first quarter of 2012.

Business Outlook

The company today reaffirmed its guidance for 2012:

Revenue			€275 million – €285 million
Adjusted EBITDA			€112 million – €120 million
Capital Expenditure (including intangibles)			€170 million – €190 million

Conference Call to Discuss Results

The company will host a conference call today at 8:30am ET (1:30pm BST, 2:30pm CET) to discuss the results.

To participate in this call, US callers may dial toll free, 1-866-966-9439; callers outside the US may dial direct, +44 (0)1452 555 566. The conference ID for this call is 97898814. This event will also be webcast live over the Internet in listen-only mode at investors.interxion.com.

A replay of the call will be available from shortly after it ends until 14 August 2012. To access the replay, US callers may dial toll free, 1-866-247-4222; callers outside the US may dial direct, +44 (0)1452 550 000. The replay access number is 97898814#.

Forward-looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the difficulty of reducing operating expenses in the short term, inability to utilise the capacity of newly planned data centres and data centre expansions, significant competition, the cost and supply of electrical power, data centre industry over-capacity, performance under service-level agreements, and other risks described from time to time in Interxion’s filings with the Securities and Exchange Commission. Interxion does not assume any obligation to update the forward-looking information contained in this press release.

Use of Non-IFRS Information

EBITDA is defined as operating profit plus depreciation, amortization and impairment of assets. We define Adjusted EBITDA as EBITDA adjusted to exclude share-based payments, increase/decrease in provision for onerous lease contracts, IPO transaction costs, and income from sub-leases on unused data centre sites. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue. We present EBITDA, Adjusted EBITDA and Adjusted EBITDA margin as additional information because we understand that they are measures used by certain investors and because they are used in our financial covenants in our €60 million revolving credit facility and €260 million 9.50% Senior Secured Notes due 2017. However, other companies may present EBITDA, Adjusted EBITDA and Adjusted EBITDA margin differently than we do. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance under IFRS and should not be considered as an alternative to operating profit or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measure of performance derived in accordance with IFRS.

A reconciliation from Operating Profit to EBITDA and Adjusted EBITDA is provided in the Notes to Consolidated Income Statement: Adjusted EBITDA reconciliation later in this press release.

Interxion does not provide forward-looking estimates of Operating Profit, Depreciation, Amortization, and Impairments, Share-based Payments, or increase/decrease in provision for onerous lease contracts, IPO transaction costs, abandoned transaction costs, income from sub-leases on unused data centre sites and net insurance compensation benefit, which it uses to reconcile to Adjusted EBITDA. The Company is, therefore, unable to provide reconciling information for Adjusted EBITDA.

About Interxion

Interxion (INXN) is a leading provider of carrier-neutral colocation data centre services in Europe, serving a wide range of customers through 31 data centres in 11 European countries. Interxion’s uniformly designed, energy-efficient data centres offer customers extensive security and uptime for their mission-critical applications. With connectivity provided by over 400 carriers and ISPs and 18 European Internet exchanges across its footprint, Interxion has created content and connectivity hubs that foster growing customer communities of interest. For more information, please visit www.interxion.com.

INTERXION HOLDING NV
CONSOLIDATED INCOME STATEMENT
(in €’000 – except per share data and where stated otherwise)
(unaudited)
					Three Months Ended							Six Months Ended
					30-Jun			30-Jun				30-Jun			30-Jun
					2012			2011				2012			2011
Revenue					68,004			60,023				133,816			117,915
	Cost of sales				(28,230	)		(25,522	)			(54,729	)		(50,302	)
Gross profit					39,774			34,501				79,087			67,613
	Other income				114			115				232			242
	Sales and marketing costs				(4,664	)		(4,591	)			(9,514	)		(8,803	)
	General and administrative costs				(18,493	)		(16,496	)			(36,014	)		(33,795	)
Operating profit					16,731			13,529				33,791			25,257
	Net finance expense				(3,876	)		(5,986	)			(8,311	)		(12,574	)
Profit before taxation					12,855			7,543				25,480			12,683
	Income tax expense				(4,131	)		(2,319	)			(8,060	)		(4,651	)
Net profit					8,724			5,224				17,420			8,032
Basic earnings per share: (€)					0.13			0.08				0.26			0.13
Diluted earnings per share: (€)					0.13			0.08				0.26			0.12
	Number of shares outstanding at the end of the period (shares in thousands)				67,599			65,619				67,599			65,619
	Weighted average number of shares for Basic EPS (shares in thousands)				67,140			65,579				66,741			62,398
	Weighted average number of shares for Diluted EPS (shares in thousands)				68,021			67,536				67,693			64,534
Capacity Metrics
Equipped space (in square meters)					65,300			61,500				65,300			61,500
Revenue generating space (in square meters)					48,600			45,300				48,600			45,300
Utilisation rate					74	%		74	%			74	%		74	%

INTERXION HOLDING NV
	NOTES TO CONSOLIDATED INCOME STATEMENT: SEGMENT INFORMATION
(in €’000 – except where stated otherwise)
(unaudited)
					Three Months Ended							Six Months Ended
					30-Jun			30-Jun				30-Jun			30-Jun
					2012			2011				2012			2011
Consolidated
	Recurring revenue				62,867			56,244				125,146			110,386
	Non-recurring Revenue				5,137			3,779				8,670			7,529
Revenue					68,004			60,023				133,816			117,915
Adjusted EBITDA					27,766			23,321				55,102			45,531
Gross Margin					58.5	%		57.5	%			59.1	%		57.3	%
Adjusted EBITDA Margin					40.8	%		38.9	%			41.2	%		38.6	%
Total assets					774,738			702,513				774,738			702,513
Total liabilities					416,989			395,984				416,989			395,984
Capital expenditure, including intangible assets (i)					(42,572	)		(18,952	)			(103,672	)		(38,470	)
France, Germany, Netherlands, and UK
	Recurring revenue				38,446			33,561				76,459			65,806
	Non-recurring Revenue				3,907			2,535				6,199			4,962
Revenue					42,353			36,096				82,658			70,768
Adjusted EBITDA					21,828			17,964				43,405			34,743
Gross Margin					60.2	%		58.5	%			61.3	%		58.5	%
Adjusted EBITDA Margin					51.5	%		49.8	%			52.5	%		49.1	%
Total assets					494,213			296,740				494,213			296,740
Total liabilities					99,136			86,519				99,136			86,519
Capital expenditure, including intangible assets (i)					(34,562	)		(9,479	)			(87,055	)		(21,819	)
Rest of Europe
	Recurring revenue				24,421			22,683				48,687			44,580
	Non-recurring Revenue				1,230			1,244				2,471			2,567
Revenue					25,651			23,927				51,158			47,147
Adjusted EBITDA					13,476			12,165				26,884			24,267
Gross Margin					61.5	%		61.0	%			61.4	%		61.0	%
Adjusted EBITDA Margin					52.5	%		50.8	%			52.6	%		51.5	%
Total assets					189,219			160,436				189,219			160,436
Total liabilities					40,837			37,139				40,837			37,139
Capital expenditure, including intangible assets (i)					(6,848	)		(8,539	)			(14,771	)		(14,803	)
Corporate and Other
Adjusted EBITDA					(7,538	)		(6,808	)			(15,187	)		(13,479	)
Total assets					91,306			245,337				91,306			245,337
Total liabilities					277,016			272,326				277,016			272,326
Capital expenditure, including intangible assets (i)					(1,162	)		(934	)			(1,846	)		(1,848	)
	(i) Capital expenditure, including intangible assets, represents payments to acquire property, plant and equipment and intangible assets, as recorded in the consolidated statement of cash flows as “Purchase of property, plant and equipment” and “Purchase of intangible assets” respectively.

INTERXION HOLDING NV
	NOTES TO CONSOLIDATED INCOME STATEMENT: Adjusted EBITDA reconciliation
(in €’000 – except where stated otherwise)
(unaudited)
					Three Months Ended							Six Months Ended
					30-Jun			30-Jun				30-Jun			30-Jun
					2012			2011				2012			2011
Reconciliation to adjusted EBITDA
Consolidated
Operating profit					16,731			13,529				33,791			25,257
	Depreciation, amortization and impairments				10,236			9,568				19,891			18,094
EBITDA					26,967			23,097				53,682			43,351
	Share-based payments				913			339				1,652			679
	Increase/(decrease) in provision for onerous lease contracts				–			–				–			18
	IPO transaction costs (ii)				–			–				–			1,725
	Income from sub-leases on unused data center sites				(114	)		(115	)			(232	)		(242	)
Adjusted EBITDA					27,766			23,321				55,102			45,531
France, Germany, Netherlands, and UK
Operating profit					16,004			12,265				32,213			23,915
	Depreciation, amortization and impairments				5,776			5,753				11,101			10,899
EBITDA					21,780			18,018				43,314			34,814
	Share-based payments				162			61				323			153
	Increase/(decrease) in provision for onerous lease contracts				–			–				–			18
	Income from sub-leases on unused data center sites				(114	)		(115	)			(232	)		(242	)
Adjusted EBITDA					21,828			17,964				43,405			34,743
Rest of Europe
Operating profit					9,486			8,835				19,181			17,858
	Depreciation, amortization and impairments				3,883			3,289				7,489			6,287
EBITDA					13,369			12,124				26,670			24,145
	Share-based payments				107			41				214			122
Adjusted EBITDA					13,476			12,165				26,884			24,267
Corporate and Other
Operating Profit/(Loss)					(8,759	)		(7,571	)			(17,603	)		(16,516	)
	Depreciation, amortization and impairments				577			526				1,301			908
EBITDA					(8,182	)		(7,045	)			(16,302	)		(15,608	)
	Share-based payments				644			237				1,115			404
	IPO transaction costs (ii)				–			–				–			1,725
Adjusted EBITDA					(7,538	)		(6,808	)			(15,187	)		(13,479	)
	(ii) The IPO transaction costs represent the write off of the proportion of the IPO costs allocated to the selling shareholders at the Initial Public Offering.

INTERXION HOLDING NV
CONSOLIDATED BALANCE SHEET
(in €’000 – except where stated otherwise)
(unaudited)
							As at
							30-Jun				31-Dec
							2012				2011
Non-current Assets
	Property, plant and equipment						562,122				477,798
	Intangible assets						17,330				12,542
	Deferred tax assets						33,919				39,557
	Financial fixed assets						774				–
	Other non-current assets						4,575				3,841
							618,720				533,738
Current Assets
	Trade and other current assets						71,532				67,874
	Cash and cash equivalents						84,486				142,669
							156,018				210,543
Total Assets							774,738				744,281
Shareholders’ Equity
	Share capital						6,760				6,613
	Share premium						472,775				466,166
	Foreign currency translation reserve						10,398				7,386
	Accumulated deficit						(132,184	)			(149,604	)
							357,749				330,561
Non-current Liabilities
	Trade payables and other liabilities						10,893				10,294
	Deferred tax liabilities						1,995				1,742
	Provision for onerous lease contracts						9,237				10,618
	Borrowings						257,594				257,267
							279,719				279,921
Current Liabilities
	Trade payables and other liabilities						130,984				127,639
	Income tax liabilities						3,002				2,249
	Provision for onerous lease contracts						3,136				3,108
	Borrowings						148				803
							137,270				133,799
Total Liabilities							416,989				413,720
Total Liabilities and Shareholders’ Equity							774,738				744,281

	INTERXION HOLDING NV
	NOTES TO THE CONSOLIDATED BALANCE SHEET: BORROWINGS
	(in €’000 – except where stated otherwise)
	(unaudited)
									As at
									30-Jun				31-Dec
									2012				2011
Borrowings Net of Cash and Cash Equivalents
Cash and Cash Equivalents (iii)									84,486				142,669
	9.5% Senior Secured Notes due 2017 (iv)								255,914				255,560
	Financial Leases								223				337
	Other Borrowings								1,605				2,173
Borrowings Excluding Revolving Credit Facility Deferred Financing Costs									257,742				258,070
	Revolving credit facility deferred financing costs (v)								(1,523	)			(667	)
Total Borrowings									256,219				257,403
Borrowings Net of Cash and Cash Equivalents									171,733				114,734
	(iii) Cash and cash equivalents includes €4.9 million as of June 30, 2012 and €4.8 million as of December 31, 2011, which is restricted and held as collateral to support the issuance of bank guarantees on behalf of a number of subsidiary companies.
	(iv) €260 million 9.5% Senior Secured Notes due 2017 include premium on additional issue and are shown after deducting underwriting discounts and commissions, offering fees and expenses.
	(v) Deferred financing costs of €1.5 million incurred in connection with the €60 million revolving credit facility, which is currently undrawn.

	INTERXION HOLDING NV
	CONSOLIDATED STATEMENT OF CASH FLOWS
	(in €’000 – except where stated otherwise)
	(unaudited)
					Three Months Ended							Six Months Ended
					30-Jun			30-Jun				30-Jun			30-Jun
					2012			2011				2012			2011
	Profit for the period				8,724			5,224				17,420			8,032
	Depreciation, amortization and impairments				10,236			9,568				19,891			18,094
	IPO transaction costs				–			–				–			1,725
	Unwinding provision for onerous lease contracts				(794	)		(779	)			(1,579	)		(1,553	)
	Share-based payments				913			339				1,652			679
	Net finance expense				3,876			5,986				8,311			12,574
	Income tax expense				4,131			2,319				8,060			4,651
					27,086			22,657				53,755			44,202
	Movements in trade and other current assets				3,142			1,603				(3,785	)		(5,680	)
	Movements in trade and other liabilities				(862	)		(1,225	)			4,815			5,190
Cash Generated from Operations					29,366			23,035				54,785			43,712
	Interest paid				(157	)		(421	)			(10,131	)		(12,580	)
	Interest received				172			266				320			537
	Income tax paid				(1,591	)		(465	)			(2,302	)		(1,152	)
Net Cash Flows from Operating Activities					27,790			22,415				42,672			30,517
Cash Flow from Investing Activities
	Purchase of property, plant and equipment				(41,528	)		(16,240	)			(101,223	)		(35,364	)
	Disposals of property, plant and equipment				–			945				–			945
	Purchase of intangible assets				(1,044	)		(2,712	)			(2,449	)		(3,106	)
	Acquisition financial fixed assets				–			–				(774	)		–
	Movement in short-term investments				–			(90,000	)			–			(90,000	)
Net Cash Flows from Investing Activities					(42,572	)		(108,007	)			(104,446	)		(127,525	)
Cash Flow from Financing Activities
	Proceeds from exercised options				2,554			–				5,104			2,324
	Proceeds from issuance of new shares				–			(400	)			–			142,952
	Repayment of “Liquidation Price” to former preferred shareholders				–			–				–			(3,055	)
	Proceeds from Senior Secured Notes and RCF				(955	)		(206	)			(955	)		(645	)
	Other Borrowings				(624	)		(849	)			(681	)		(1,588	)
Net Cash Flows from Financing Activities					975			(1,455	)			3,468			139,988
	Effect of exchange rate changes on cash				113			(241	)			123			(124	)
Net Movement in Cash and Cash Equivalents					(13,694	)		(87,288	)			(58,183	)		42,856
	Cash and cash equivalents, beginning of period				98,180			229,259				142,669			99,115
Cash and Cash Equivalents, End of Period					84,486			141,971				84,486			141,971

INTERXION HOLDING NV

Announced Expansion Projects

with Target Open Dates in 2012 & 2013

Market

Project

CAPEX (a, b)

Equipped Space (a)

Target Opening

(€ million)

(Sqm)

Stockholm

STO 1: Phase 4 Expansion

€ 5

500

1Q 2012 (opened)

Frankfurt

FRA 7: New Build

€ 21

1,500

1Q 2012 (opened)

Paris

PAR 7 : Phase 1 New Build

€ 70

4,500

2Q 2012 (opened) (c)

London

LON 2: New Build

€ 38

1,600

3Q 2012 (opened) (d)

Amsterdam

AMS 6: New Build

€ 60

4,000

4Q 2012

Madrid

MAD 2: New Build

€ 10

800

1Q 2013

Total

€ 204

12,900

(a) CAPEX and Equipped Space are approximate and may change after project completion.

(b) CAPEX reflects the total for the listed project at full power and capacity and may not be all invested in the current year.

(c) 500 sqm opened in 2Q 2012; 1500 sqm to be opened in 3Q 2012; remainder by end of 1Q 2013

(d) 500 sqm opened in July; additional 400 sqm to open in August; remaining 700 sqm to open by year end 2012.

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